Ccm-f 

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Duke  University  Libraries 
Letter  to  chair 
Conf  Pam  q#28 


Creasttrij  lejiartnicnt,  C.  |,  51. 

RICHMOND,  November  21,   1864. 
Hon.  F.  S.  LYON, 

Chairman  Committee  Ways  <£••  Means, 

C.  S.  Ho.  Heps. : 

SIR, 

The  doubts  esprei^sed  as  to  the  equality  of  limiting  the  tax  in  kind  for  the  support  of  the  currency  to  three  articles 
only,  have  had  my  attentive  consideration,  and  my  convictions  have  not  undergone  any  change. 

Assuming  tlie  sum  of  notes  to  be  redeemed  at  $  400,000,000,  and  the  proportion  of  North  Carolina,  for  example,  at  one-tenth 
or  $40,000,000,  the  tax  in  kind  for  that  State  would  be,  in  corn,  20,000,000  bushels;  and  it  appears  to  me  that  the  burthen  of  the 
tax  is  in  no  degree  affected  by  the  mode  of  payment.  Being  one  tenth  of  the  agricultural  income,  if  paid  in  kind,  it  would  take 
from  the  farmer  20,000,000  busliels  of  corn;  and  if  paid  in  money,  the  value  of  that  quantity.  Consequently  the  State  of  Virginia, 
though  not  taxed  in  kind  on  the  tobacco  crop,  if  taxed  one-tenth  of  the  v.alue  in  money,  would  sell  that  proportion  of  the  crop  and 
paying  the  money  into  the  Treasury,  contribute  thereby  her  equal  share  to  the  common  burthen. 

To  extend  the  tax  to  all  the  present  subjects  of  the  tax  in  kind,  would  cnl.irge  the  sinking  fund  and  allay  the  apprehensions  of 
possible  inequality  ;  but  there  is  something  w.anting  besides  a  sinking  fund  ;  we  want  a  measure  of  value  also.  Onild  we  commence 
the  immediate  redemption  of  tho  notes  in  specie,  and  give  to  all  the  assurance  of  receiving  payment  on  demand,  the  currency  would 
rise  at  once  to  specie  value.  Could  we  enter  immediately  upon  the  redemption  in  corn  at  $  I  per  bushel,  with  the  assurance  of  an 
adequate  sujiply  to  meet  all  demands,  the  appreciation,  I  think,  would  be  nearly  as  r.-ipid,  and  the  restoration  of  tho  value  almost 
complete.     My  impressions  are  that  it  w-onld  be  (iiiite  complete  if  the  privilege  of  exportation  could  be  given  tc  the  purchaser. 

The  uniformity  of  quality  that  belongs  to  this  staple;  its  character  as  an  article  of  food  ;  its  universal  use;  and  its  simplicity 
as  an  article  of  commerce,  cumbine  to  give  it  a  value  more  uniform  and  stable,  and  more  extensively  known  in  our  country  than  that 
of  any  other  commodity  except  gold  .and  silver.  For  this  reason,  had  the  supply  of  corn  been  equal  to  the  redemption  of  the  notes 
within  a  reasonable  time,  and  the  immediate  funding  of  a  large  proportion  not  been  of  such  great  inifortance,  I  would  have  inclined 
strongly  to  the  use  of  corn  ^lone.  To  encourage  imn)e<Iiate  funding,  and  secure  adequate  moans  for  the  early  redemption  of  the 
whole,  cotton  and  wheat  were  added,  but  it  must  he  admitted,  1. think,  that  these  additions  impair,  to  some  extent,  the  simplioity  of 
the  plan,  and  the  certainty  and  invariability  of  the  value  of  the  notes.  Three  classes  of  certificates,  in  unerpial  proportions  and  of 
different  value,  nnist  now  be  used  in  lieu  of  one  certificate  of  uniform  value.  The  necessity  however  of  providing  an  ailoquate  fund 
rendered  this  concession  unavoid!*ble.     But  to  go  further  in  tliis  direction  seems  unnecessary. 

If  tobacco,  sugar,  rice,  hay,  hemp,  .tc.  wore  iiitiudueed,  the  yield  of  each,  and  the  ratio  it  bears  to  the  others,  would  have  to  be 
ascertained,  the  comparative  value  to  be  determined,  and  another  class  of  certificates  for  each  to  be  issued,  in  the  just  proportion  it 
bore  to  the  others.  This  would  greatly  complicate  the  plan  and  seriously  endanger  its  successful  execution,  and  at  the  same  time 
define  and  express  with  less  clearness  and  precision  tiie  value  of  the  notes.  More  I  think  Would  be  lost  thereby,  in  that  part  of  the 
plan  which  is  designed  to  ilotlie  the  notes  with  the  attributes  and  qualify  them  to  perfurm  the  functions  of  money,  than  would  be 
gained  by  enlarging  the  sinking  fund,  wliicli  is  .ilready  anipb-.  My  impressions  are  very  strong  that  this  view  of  the  subject  is 
correct,  and  I  hope  tho  deliberatioiis  of  the  Committee  may  bring  them  to  tho  same  conclusions.  Speedy  legislation  is  of  the  utmost 
importance,  and  tnanimity  would  be  of  great  value,  in  inq/ning  confidence  and  securing  the  co-opeiation  of  the  citizens  and  the 
States.  The  latter  may  contribute  greatly  to  the  success  of  the  measure,  and  at  the  same  time  materially  reduce  the  burthen  of 
the  tax. 

Take  tho  St.tte  of  North  Carolina  as  an  example.  Suppose  her  share  of  the  debt  created  by  the  issue  of  Treasury  notes  to  be 
Ji 40,000,000,  and  this  measure  be  not  adopted,  but  by  funding  or  otherwise  tho  payment  of  the  notes  in  money  be  provided  for  ;  in 
that  case  her  citizens  would  have  ? 40,000,000  to  pay  in  specie  at  a  future  day.  To  raise  this  sum  after  the  war  would  require  at 
least  50,000,000  bushels  of  corn  ;  while  under  the  proposed  plan  20,000.000  bushels  would  suffice.  It  offers  also  other  and  greater 
advantages.  If  she  can  borrow  $2,000,000  in  specie  and  sterling  exchange,  which  her  banks  may  in  a  great  degree  supply,  she  may. 
in  the  ratio  of  20  for  1,  buy  up  the  whole  sum  of  $40,000,000  and  reduce  her  indebtedness  from  40  millions  to  2  millions,  and  relieve 
her  citizens  from  the  tax  of  20,000,000  bushels  of  corn.  Or  in  other  words,  she  may  purchase  20,000,000  bushels  of  corn  at  10  cents 
per  bushel.  It  would  be  the  interest  of  every  State,  I  think,  to  pursue  this  course,  whether  her  citizens  contributed  to  the  tax  in 
kind  set  apart  for  the  currency  or  not.  If  Virginia,  for  example,  purchase  half  the  certificates  for  which  North  Carolina  was  to 
provide  the  means  of  redemption,  the  benefit  to  her  citizens  would  bo  precisely  the  same  as  that  predicated  of  North  Carolina.  Each, 
upon  the  hypothesis  stated,  by  the  expenditure  of  $1,000,000  in  coin  would  acquire  $20,o0d,00t)  in  certificates.  North  Carolin.-i 
would  thereby  commute  a  tax  in  kind  of  10,000,000  bushels  of  coin,  and  Virginia  would  levy  a  tax  on  other  States  of  10,000,000 
bushels  of  corn.  If  the  value  of  corn  ip  the  market  were  $1  a  bushel.  North  Carolina,  by  laying  out  §  1,000,000  now,  would  save 
$10,000,000;  Virginia,  by  the  same  means,  would  make  $10,000,000,  and  reimburse  her.seif  for  a  money  tax  of  $  10,000,000, 

I  venture  respectfully  to  submit  these  reflections  to  the  consideration  of  the  Committee,  and  remain. 


With  sentiments  of  great  respect, 

Your  most  ob't  serv't, 


G.  A.  TRENHOL.M, 

SiXTclar;/  of  Tnasui-y. 


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